Infineon executive sees modest growth, but no bounce back in 2002

SANTA CLARA, Calif. -- The top U.S. executive from Infineon Technologies AG predicted modest growth in the overall semiconductor industry in 2002, but he also expressed some "concerns" about the weakened marketplace as well.

The worldwide IC industry could show "single-digit growth" in terms of revenue in 2002 over 2001, predicted Jan du Preez, president of Infineon Technologies Inc. The San Jose-based company is the U.S. subsidiary of Munich-based Infineon Technologies.

"2002 will be a better year than 2001," Preez said. "But I don't see any bounce back in the worldwide IC market for this calendar year," he added.

And it could be a slow and painful IC recovery, he warned. "It's going to take awhile before the semiconductor market gets back to the 2000 levels," he told SBN after a presentation at this week's JEDEX conference here.

During his presentation, Preez urged memory device makers to embrace standards in order to change an ongoing pattern of confusion and "island solutions" in the PC and semiconductor markets (see March 27 story). The first JEDEX conference was held in Santa Clara this week by the JEDEC Solid State Technology Association, which is a key industry group involved in setting memory and other chip standards.

The Infineon executive sees a mixed bag for the overall IC market in 2002. "We are encouraged about the PC and DRAM markets," Preez said. "Automotive is very stable. We see double-digit growth in automotive."

On the other hand, the communications market is still in the tank. "The biggest concern is networking and telecommunications," said the San Jose-based Infineon executive. "There's too much capacity in the telecom industry."

While Preez seemed encouraged about the DRAM industry, he also voiced some "concerns" about the market as well. "One concern is the recent drop in price in the spot market," he said, referring to the sudden decrease in DRAM prices on the spot market after more than several months of price hikes.

Another concern is the outcome of the slow and painful merger talks between Micron Technology Inc. and Hynix Semiconductor Inc. The companies have been talking about a merger for weeks, but the two parties have yet to resolve their differences.

Preez said industry executives are keeping a close eye on the merger talks and for good reason: the DRAM industry is still in need of a major consolidation to sustain any growth and profits for vendors. "Everybody is under cash pressure," he noted.

Earlier this week, in fact, Taiwan's Nanya Technology Corp. said is in talks with Infineon regarding a potential collaboration. Infineon has decided to team up with Nanya to construct two 300-mm wafer fabs to produce DRAMs in Taiwan.

The talks come three weeks after Munich-based Infineon announced that it agreed to turn to Taiwan's Mosel Vitelic Inc. and Winbond Electronics Corp. for extra capacity (see story).

Preez declined to comment on the talks with Nanya. "We are talking to everybody," he said.